Transalta Corporation · TSX:TA
Transalta — Investor Presentation (February 2005)
13 slides from Transalta's investor presentation, February 2005
Slide 1: Investor Update February 2005
Investor Update February 2005
Slide 2: Forward looking statements
Forward looking statements This presentation may contain forward-looking statements, including statements regarding the business and anticipated financial performance of TransAlta Corporation. These statements are subject to a number of risks and uncertainties that may cause actual results to differ
Slide 3: Financial highlights for the year
Financial highlights for the year TransAlta (Millions $Cdn) 2004 2003 Net earnings $170 $234 per share $0.88 $1.26 Comparable earnings $135 $130 per share $0.70 $0.70 Cash flow* $588 $538 Debt to capital 47.4% 47.7% Cash flow to debt 18.5% 17.2% *From operations before changes in working capital 3l
Slide 4: Free cash flow is positive
Free cash flow is positive Millions $Cdn Q4 - 2004 Q4 - 2003 2004 2003 Comparable earnings $ 37 $ 29 $ 135 $ 130 Plus: depreciation & amortization 103 107 412 378 Less: maintenance and other capex 89 5 224 101 Less: scheduled debt repayment 12 27 51 138 Comparable free cash flow $ 39 $ 104 $ 272 $ 2
Slide 5: Financial ratios continue to improve
Financial ratios continue to improve Cash flow to Interest • Improve to BBB+ ratios 6.0 5.0 • Sustain dividend 4.0 3.0 BBB+ BBB- • Modest growth Capex 2.0 1.0 0.0 2004 2005 2006 2007 2008 2009 Debt to Capital Cashflow to Debt BBB- 50% 35% BBB+ 30% 45% BBB+ 25% BBB- 40% 20% 15% 35% 10% 30% 5% 2004 20
Slide 6: Results are seasonal
Results are seasonal TransAlta (Millions $Cdn) Q1 Q2 Q3 Q4 Revenue $701 $656 $743 $713 Comparable earnings $48 $16 $34 $37 Cash flow* $161 $107 $167 $152 Planned maintenance expenditures $14 $68 $63 $29 *From operations before changes in working capital 6l
Slide 7: TransAlta's financial strategy – manage cyclicality
TransAlta’s financial strategy – manage cyclicality Balance acquisitions with new build. Maintain high contract cover. Minimize foreign exchange exposure. GROW STRENGTHEN INTEGRATE FINANCIAL CAPACITY Non-growth capex and dividend from Pay down debt and/or operating cash flow. buy back shares 7l
Slide 8: Operational highlights for the year
Operational highlights for the year TransAlta 2004 2003 Availability 89.1% 90.6% Planned maintenance (millions $Cdn) - capex $99 $35 - opex $75 $77 $174 $113 Lost production (GWh) 2,587 2,198 % of capacity contracted 87.0% 96.0% 8l
Slide 9: Maintenance spending will peak in 2005 and will trend lower
Maintenance spending will peak in 2005 and will trend lower, with more predictability, and increased efficiencies 2000 - 02 2003 - 04 2005 - 06 2007+ Total spend $mm 110 - 140 115 - 175 205 - 235 150 - 175 Capex/Opex % 60/40 70/30 70/30 70/30 Lost Avg. Gwh 2000 2300 - 2600 2900 - 3000 2300 - 2700 Pr
Slide 10: TransAlta's success as a power company depends on managing cyclicality
TransAlta’s success as a power company depends on managing cyclicality MANAGING CYCLICALITY TransAlta’s Strengths Operational excellence Low cost assets and tradition of Strong financial capacity generation excellence Prudent growth expectations Real-time market knowledge and risk mitigati
Slide 11: Drivers of near-term earnings growth
Drivers of near-term earnings growth Actions Benefits Contract for Sarnia Higher operating income Recontract Centralia Higher operating income Genesee 3 and Wind Higher operating income Pay down debt Less interest Buy back shares Higher EPS Goal: increase returns on invested capital 11l
Slide 12: Appendix
Appendix TransAlta
Slide 13: Financial results are increasingly transparent
Financial results are increasingly transparent TransAlta (Millions $Cdn) 2002 2003 Q4 - 2004 2004 Reported net earnings $200 $234 $62 $170 Prior period regulatory decision -2 - - -15 Gain on sale of transmission 120 - - - Gain on sale of land - 9 - - Refinancing of foreign operations 11 - - - Gain o